Ruralco could be one of the buyers of MG stores and Willows Mitre 10 closes down

HNN Sources

Diversified agribusiness, Ruralco has expressed interest in a number of MG Trading stores, according to sources; and rising costs and falling trade have been blamed for the shutdown of Willows Mitre 10.

Buyers for Murray Goulburn stores

Ruralco is looking to buy Murray Goulburn's (MG) trading stores, sources told Weekly Times Now. The sources said Ruralco subsidiaries expressed interest in a number of MG Trading stores in late 2017.

This comes as MG has confirmed it has the right to sell the network of 25 stores and six fertiliser depots in Victoria, despite announcing in October it was selling the co-operative's assets to Canadian dairy giant Saputo.

There are many businesses under the Ruralco banner throughout Australia, including Tasmanian agribusiness and real estate company Roberts, Combined Rural Traders (CRT) and Rodwells.

Ruralco reported revenue of $1.8 billion and after-tax profits of $30 million last financial year and is understood to be in the mix to buy at least some of MG Trading's assets.

Saputo, which is set to buy MG's assets for $1.31 billion subject to government agency approval and shareholder support, said dairy processing was its first priority in Australia but it would keep the MG Trading stores operating if required. A Saputo spokeswoman said:

We are not retailers. That being said, we understand that these trading stores are very important to some of the local communities. If these assets are not sold by MG prior to completion, we will inherit them and put the right management in place and operate the stores.

An MG spokesman said all the co-operative's operating assets would be included in the Saputo transaction, unless the trading stores were sold beforehand.

MG does not currently have any formal sale process under way in relation to MG Trading.

Elders, which also operates rural stores, has plans to extend its branch network and identified Victoria's Western District as one area of particular interest. Elders managing director Mark Allison said he approached Deutsche Bank during the MG sale process to buy the stores but was told the dairy co-operative would be sold as a whole. Mr Allison said:

We were told that whoever bought Murray Goulburn would sell off parts of the business. But we've had no contact since it has been sold. I would assume they would come to us if they are selling the branch network.

Mr Allison said Elders was opening a store in Mortlake as part of its branch network expansion.

Falling trade leads to closure

Willows Mitre 10 in Townsville (QLD) has shut its doors. It closed in December with a sign thanking its customers and being closed indefinitely.

Moira Carter of BRI Ferrier, was appointed liquidator, and said costs such as rent and electricity were increasing when trade and income was falling. She told the Townsville Bulletin:

You just can't support businesses under those circumstances.

The main debtors for store are Mitre 10 and a bank. Ms Carter said employees had been paid most of their entitlements.

Townsville Chamber of Commerce president Debbie Rains said it was sad to see small businesses close and urged people to support local businesses.

From a chamber perspective, it's always very disappointing to see the closure of local small businesses. We encourage people to shop locally as much as possible and hopefully prevent more closures like this.

Ms Rains said small business was the backbone of the economy, employing a lot of people.

If people do shop locally and continue to support local business, the dollar goes around 13 times. You are actually helping to spread the dollar further in our local community.